Alitalia
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Alitalia (ISEQ: [IT0003331888]
History
Alitalia was established on 16 September 1946 as Aerolinee Italiane Internazionali (more commonly known as Alitalia). It started operations on 5 May 1947, in which year it carried over 10,000 passengers. The inaugural flight was with a Fiat G-12 Alcione, piloted by Virginio Reinero between Turin and Rome. The first international flight left a year later, travelling between Milan and cities in South America. On 31 October 1957 Alitalia merged with Linee Aeree Italiane and took on the name of Alitalia Linee Aeree Italiane.
By the 1990s, Alitalia was carrying nearly 25 million passengers annually. In 1997 it set up a regional subsidiary Alitalia Express and in 2001 it became a member of the SkyTeam Alliance. In November 2003 Alitalia announced that it would cut 2700 jobs over the next three years to prepare the airline for a merger with Air France and KLM. In April 2004 Alitalia acquired bankrupt regional airline Gandalf Airlines to gain additional slots at several European airports, mainly in Milan (Linate) and Paris (Charles De Gaulle).
In September 2004 the airline found itself in serious financial difficulties, with management saying it did not have enough cash to pay worker salaries past the end of that month. It announced plans to lay off 5000 employees and to split the company into two divisions, an airline and a ground services division. It also said it was reconsidering its alliance with Air France. Talks went on with unions for pay cuts and layoffs, in an attempt to keep the company out of bankruptcy and possibly liquidation. On September 24, the company announced that it had reached an agreement with unions allowing access to a bridging loan from the Italian government. While more money may be needed in early 2005, the airline seems to have avoided the threat of bankruptcy.
Adding to the troubled airline's difficulties Italy's Antitrust agency fined Alitalia EUR30,000 (USD$35,800) for misleading consumers by advertising a round-trip flight tariff but showing only the price of a one-way ticket on its official website (December 2005).
More recently the European Commission has opened an in-depth investigation of Italy's plans to restructure Alitalia to ensure that the ailing flag carrier does not receive illegal subsidies. The planned €1.2 billion (US$1.6 billion) recapitalization of the near-bankrupt carrier, involving massive job cuts, is expected to take place in the spring of 2006.
Alitalia is owned by the Italian Ministry of the Treasury (49%), other shareholders, including employees (49%) and Air France-KLM (2%). It employs 20,653 staff (at November 2005).
"MilleMiglia" is Alitalia's membership card that allows customers to save miles and trade them for free tickets.
Incidents and accidents
- Six Alitalia flights have been hijacked.
- There have been at least four aircraft incidents involving Alitalia planes:
On 5 May 1972 an Alitalia DC8-43 flew into the side of a hill near Palermo, Italy, during an approach in darkness and poor weather; the seven crew members and 108 passengers were killed.
On 23 December 1978, an Alitalia DC9-32 crashed into the sea about two miles short of the runway of Palermo Punta Raisi Airport during its approach; all five crew members and 103 of 124 passengers were killed.
On November 14, 1990 in Zurich an Alitalia aircraft crashed killing all passengers on board a half-filled McDonnell Douglas DC-9-32.
Lawsuits and complaints
Alitalia is infamous for its customer services when dealing with complaints and lost luggage. The company's attitude towards its customers has sparked a series of testimonials and complaints on the web. One passenger, whose bag was lost in October 2000, continues to maintain [Alitalia Sucks.com], a website "dedicated to all those that have ongoing unresolved problems including lack of compensation for baggage claims and flight delays and cancellations" (though, despite a solicitation for others' stories, the owner's is the only one described).
Alitalia filed a lawsuit against the website in the US courts, claiming the violation of various trademark laws – the Anticybersquatting Consumer Protection Act, the Lanham Act, and the state common law of trademark. The corporation's complaint was withdrawn when Public Citizen, a US national non-profit consumer advocacy organization stepped in to support the website's owners according to the First Amendment.
In December 2005, Italy's antitrust agency fined Alitalia €30,000 for misleading consumers by advertising a round-trip flight tariff while showing only the price of a one-way ticket.
The antitrust agency in a statement said the advertisement appeared on Alitalia's web site during May and June. "The advertisement, that appeared on the main page, indicated that the price was particularly good value," the antitrust agency said in a statement. It went on to call the advertisement "misleading."
Volare Group
Volare Group (Volare Airlines, Volareweb, Air Europe) had gone bankrupt and the Italian Government named a manager to bring it back in the air. In December 2005 the Italian Government put it up for sale and Alitalia ended up being the airline to offer more money and better conditions (according to Rinaldini, head of Volare Group). Second came Air One and third Meridiana/Eurofly. However, Air One went various times to court claiming that Alitalia could not buy volare has it had received state aid in the past. The Tar del Lazio court almost managed to block Alitalia's acquisition of Volare Group but then it changed idea after less than a month. The Tar del Lazio court claimed that Alitalia had repaid its 400 million Euro loan and so there would be nothing stopping it from buying Volare Group. Air One later on went to court again unsuccessfully. Alitalia created Volare SpA to buy the Volare Group. The airlines are getting closer to each other and Volare Group has started providing soft maintenance services for some Alitalia aircrafts in Milan Malpensa airport.However, in Italy the sale of Volare is considered a soap-opera as the "Consiglio di Stato" on the 23rd of May 2006 has once again blocked the acquisition of the airline. The whole procedure might have to be done again. At the moment it is not clear what is going to happen as Volare is in serious financial difficulties and before a whole sale is organised again the airline might finish the cash.
Alitalia Servizi
Cimoli, after becoming President and CEO of the Alitalia Group in order to cut costs divided the group into two holdings. Alitalia (referred to as Alitalia Fly) controls Alitalia Express, Volare SpA, Volare Airlines and Air Europe. Furthermore it controls 51% of Alitalia Servizi SpA which owns the following companies:Alitalia Airport (100%): ground handling services in Rome Fiumicino, Palermo, Cagliari. It provides passenger handling services in: Catania, Naples.
Alitalia Maintenance Systems (60%): maintenance services, it is 40% controlled by Lufthans Technik.
Atitech (100%): maintenance services in Naples.
Alitalia Servizi also provides IT services for the Alitalia Group (which will be partly outsourced) and ground handling in London Heathrow. Alitalia Servizi provides passenger handling in: Brussels, Athens and Frankfurt
Alitalia Servizi is 49% owned by Fintecna (State agency). By 2008 Alitalia Servizi could be sold as a whole or piece by piece as the agreements with the trade unions prevent Alitalia from selling Alitalia Servizi before 2008.
Malpensa hub
In 1995 Alitalia signed a partnership with KLM Royal Dutch Airlines which aimed at a merger. The aim of the partnership was developing Malpensa hub along with Amsterdam (which lacked enough landing slots to further develop) and Rome Fiumicino. The problem was that in Milan there are two airports: Milan Linate (close to city centre but small) and Milan Malpensa (far from city but big and expandable). The Italian Government planned to move all flights to Milan Malpensa apart from Milan-Rome Fiumicino.The EU airlines went to the European courts as they claimed that the development of Milan Malpensa and the closing of Milan Linate would provide an anti-competitive situation in favour of Alitalia. They claimed that Alitalia could go on feeding its Fiumicino hub from Linate but they could not. Furthermore they claimed that Malpensa was too far (40 km) and lacked the infrastructure to/from the city (the rail link would open 1 year after the opening of the hub). After many court disputes the EU decided to leave 33% of the flights in Linate until the rail link would be opened.
On the first week of operation there were many problems in the airport: the SEA-Aeroporti di Milano (Milan Airport Authority and the only handling agent at the time) staff did not know the airport well and a lot of luggage was mishandled. After about a week the situation became normal.
Shortly before the rail link opened the Transportation Minister changed. Treu was replaced by Bersani, and on the day before the remaining flights were supposed to transfer from Linate to Malpensa, he signed a document blocking the transfer of flights. This led to an overall confusion as many tickets were sold to Malpensa but then the flights were flying to Linate! KLM broke the alliance with Alitalia and Cempella (head of Alitalia) was replaced by Mengozzi who had the role of getting Alitalia back on track. In 2000 he signed a 2% share exchange with Air France and in 2001 joined the Sky Team.
Furthermore in 2001 Alitalia renewed the ground handling contract with SEA (instead of setting up Alitalia Airport ground services like in Rome Fiumicino). This was a debatable decision as the customer would deal with SEA and not Alitalia staff. In 2006 Malpensa was never fully developed (nor was Rome) and many flights were cut (such as Los Angeles)
Destinations
- Further information: Alitalia destinations
Fleet
The Alitalia fleet consists of the following aircraft (at July 2005):
- 12 Airbus A319-100
- 11 Airbus A320-200
- 23 Airbus A321-100
- 13 Boeing 767-300
- 10 Boeing 777-200
- 5 McDonnell Douglas MD-11 (all cargo)
- 72 McDonnell Douglas MD-82
In March 2006, the average fleet age was 11.6 years.
In September 2004 Alitalia announced plans to acquire four additional Boeing 777-200ERs, three more B767-300ERs and 12 additional Embraer EMB-170s for its Alitalia Express subsidiary, due to be delivered in 2007 and 2008.
External links
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